SEPs at the UPC and can “yes or no” mean just “yes”

The Unified Patent Court ‘UPC’ has issued its first ever decision on a SEP related matter. On 13 September 2024 the Munich Local Division (LD) issued a decision (in German) in favour of the patent holder Philips against infringer Belkin. The patent was a ‘Standard Essential Patent’ (SEP) relating to an inductive (wireless) power transmitter, as set out in the wireless charging standard known as “Qi”. An injunction was granted against Belkin and costs were awarded to Philips.  

The granting of an injunction gives a clear message that the UPC will grant an injunction even if the patent is a SEP, although the decision does not discuss the issue of a FRAND defence (usually run in SEP infringement cases). So this case did not address a prime consideration of most SEP cases – can a defendant before the UPC adopt a FRAND defence to avoid an injunction?

The case focussed on claim construction, with the court adopting an approach similar to that set out in the ‘Protocol to Art 69 EPC’, that the claims are to be construed in light of the description. The court decided that the implementation in question was described in the patent and also met “the objective of the patent-in-suit”. 

The LD did not stay the UPC proceedings in favour of national German proceedings.  

Claim construction 

Issue for the court

The independent claims include the feature of the power transmitter sending an acknowledgement, “the acknowledgement being indicative of an accept or rejection of the request to enter the requested negotiation phase” (identified as claim feature 20.6.1). 

The court had to consider whether power transmitters that always confirm requirements for entering a required negotiation phase with an acceptance (and do not send a rejection) fell within the scope of the independent claims. The patentee argued that they did; Belkin argued they did not. 

The court considered whether:

(a) the description of the patent in suit also describes a situation in which a declaration of acceptance is always sent to the power receiver as confirmation of the power transmitter’s response to a corresponding request and

(b) if so, whether this falls within the wording of the claim. 

Court’s decision

The court considered that the patent met condition (a) by the implementation described in paragraph [0046] and that this implementation also met “the objective of the patent-in-suit, namely to create the possibility of carrying out a negotiation phase in accordance with the patent”. 

For condition (b), when construing the claim, the court adopted an approach similar to that set out in the ‘Protocol to Art 69 EPC’, that the claims are to be construed in light of the description. “The skilled person reads the claim in a way that makes technical sense and takes into account the entire disclosure of the patent. Claims are read with a willingness to understand them in context”.  

The court stated that “The question now is whether, in view of the objective of the patent and the core of the invention (enabling entry into the negotiation phase in order to achieve a higher charging capacity, for example), a claim-compliant power transmitter must also be able to reject a request, or whether the wording of feature 20.6 also includes embodiments that always accept requests from power receiver to enter the negotiation phase, i.e. do not provide for rejection.” 

The court held that linguistically the claim “can easily be understood to mean that the answer (acknowledgement) can be either "yes" or "no". That the answer according to the wording of the feature 20.6 must also be able to read "no" is difficult to justify from a purely linguistic point of view”.

The court held that this was also the case from a technical point of view: the patent aimed to enable a negotiation phase. All that was necessary to do this was to send a “yes”. The court stated that “the description gives no indication that such a negative decision by the sender must also be possible in the initiation phase”. The court also stated that that “The essence of the invention is that the power transmitter and the power receiver can, if possible, enter a (bidirectional) negotiation phase in order to (in particular) achieve a higher performance. This goal is even optimally achieved with a power transmitter that always declares itself willing to enter this phase of negotiations.”

The court went on to state “According to the defendant's interpretation, such an embodiment would be excluded from patent protection and could be used without any consideration. This is not adequate protection in the sense of the interpretative protocol, especially since it is clear from the description that entering this negotiation phase can be mandatory (paragraph [0046]). This also ensures adequate legal certainty for third parties, because a third party cannot reasonably assume that the hard-coding of the acknowledgement ("acceptance") falls outside the scope of protection of the patent claim”.

The court also held inadmissible, as being too late, the introduction of a new prior art document that was submitted as part of the response to the Reply to the Counterclaim for revocation.

Construction in parallel national court proceedings

Interestingly, before the UPC started on1 June 2023, Philips had commenced national infringement proceedings against Belkin in Germany and Belkin had commenced national nullity proceedings also in Germany, and the German national proceedings were ongoing when the UPC proceedings were filed.  

In the German national infringement proceedings, the Düsseldorf Regional Court had construed the claim to require the power transmitter to be able to indicate both an acceptance and a rejection of the request, and had dismissed Philip’s action. Philips had appealed, but the Düsseldorf Higher Regional court dismissed the appeal in April 2024, for inadmissibility.
In the German national nullity proceedings, the Federal Patent Court had also construed the claim to require the power transmitter to be able to indicate both an acceptance and a rejection of the request. 

The Munich LD did not agree on construction, saying “Thus, contrary to the statements of the Düsseldorf Regional Court, paragraph [0173] cannot be used to justify that a service sender must be able to indicate both an acceptance and a rejection”. 

No stay of UPC proceedings in favour of national proceedings 

The court refused to stay the UPC proceedings pending the outcome of the German nullity proceedings (which were open to appeal at the time). The reason given was that “According to Art.32 UPCA, the UPC has exclusive jurisdiction for actions for a declaration of invalidity” and also that the German proceedings are in respect of Germany only whereas the UPC ones are in respect of all UPC contracting member states.  

Infringement 

On infringement, the court held the patent infringed by the corporate defendants. 

The court stated that “there is no reason not to apply the case law of the ECJ on the concept of infringer in trade mark law to patent law as well. Accordingly, an infringer within the meaning of Art. 25 and 26 UPCA is anyone who actively carries out the acts of use in question. This also includes legal persons.”

The court also considered whether the three defendants who were managing directors or directors of the corporate defendants were “intermediaries” under Art 63(1) sentence 2 UPCA. The court held that they were.  

Injunction

The court considered the possibility of the grant of an injunction “against an intermediary whose services are being used by a third party to infringe a patent”. The court held that “The decisive factor … is that the intermediary does not use the subject matter of the patent itself, but merely offers a service that is used for infringement and thereby creates a prerequisite for the infringer to be able to carry out his infringing act”. 

The court went on to say in this context “a natural person who acts as managing director of a company that commits acts of use that infringe a patent can be considered an intermediary”. However, the court did not grant an injunction against the directors. 

The court granted an injunction against the Belkin companies, giving a clear message that the UPC will grant an injunction even if the patent is a SEP. 

It is notable that the decision does not discuss the issue of a FRAND defence (usually run in SEP infringement cases). In the case of a FRAND defence, defendants sued for SEP infringement can under certain circumstances avoid an injunction by showing that they are willing and have a right to obtain a FRAND licence from the claimant and that the claimant has not respected this right. So this case did not address a prime consideration of most SEP cases – can a defendant before the UPC adopt a FRAND defence to avoid an injunction?

Decision 

Having found the patent valid and infringed, the court granted an injunction against the Belkin companies and also ordered the payment of provisional damages and 5/6 of the costs of the proceedings.  

Takeaways

The UPC is a new court establishing new jurisprudence. The absence of jurisprudence means that parties should argue their positions as they see fit, as the UPC may decide that case law should follow a path different from practice before the EPO or the national courts. 

If is not clear from the decision whether Belkin raised a FRAND defence before the UPC as it did before the German national court. If it did not, then doing so might have led to a different result before the UPC. 

On claim construction, the UPC adopted an approach similar to that set out in the ‘Protocol to Art 69 EPC’, that the claims are to be construed in light of the description.